End of textile quotas to hit Africa hard

Analysts say the new measure, which will come into effect on Saturday, will force Africa to compete with larger low-cost producers. 

 

Many African countries say the end of the World Trade Organisation Agreement on Textiles and Clothing, which for 40 years has guaranteed their textile exports duty-free, quota-free access to western markets, could spell a free-for-all rather than free trade.

 

Analysts say it will force countries such as Mauritius, Madagascar, Uganda and Lesotho to compete with countries such as China and India – larger low-cost producers which can sell their goods at cheaper prices on the global market.

 

Big players

 

“If you look at a study done by the WTO in September, it shows that India and China will grab about 80% of the world market and the remaining 20% will have to be shared by the rest of the world,” said Narainduth Boodhoo, duty director of Mauritius’ trade policy unit.

 

A flight of textile manufacturers has cost 10,000 Mauritian jobs

“Then there are other competitive suppliers like Indonesia, Thailand and Pakistan, so it is quite clear that these countries will share the remaining 20%. So what is there left for countries in Africa like Mauritius?”

 

In a move to diversify from an economy based solely on sugar production, the tiny Indian Ocean island of Mauritius shifted into the textiles sector in 1970s.
 

Garment production became one of the main motors driving the economy, with the island taking advantage of the agreement to export its goods to lucrative US and European markets.

 

Impact on Africa

 

African states are in no position to compete with Asian producers

But in the last two years, in anticipation of the end of the quota system, dozens of textile factories which set up in Mauritius to take advantage of the agreement have closed down.

 

This has resulted in more than 10,000 people losing their jobs, and the island’s unemployment hitting a record 10%.

 

“I think the impact will have a devastating socio-economic impact across the whole of Africa,” Atma Shanto, president of the Federation of United Workers, a Mauritian trade union representing hundreds of textile workers, said.

 

While efforts to postpone the phasing out of the quota system have failed, officials say it is still possible for Western nations to mute its impact on Africa.

 

They say the WTO should put in place a fund to help African countries modernise and restructure their industries, concentrating on tapping into niche markets.